Olico, a marketing and lead-generation agency that works closely with several banks and lenders in South Africa, conducted research at the end of last year to determine the type of person most likely to qualify for an unsecured loan, as well as the average size of loan actually being granted. Its source was its database of loan applications generated through its marketing channels.
Unsecured loans, according to Investopedia, are “loans supported only by the borrower’s creditworthiness, rather than by any type of collateral. Borrowers must generally have high credit ratings to be approved for certain unsecured loans”. Unsecured loans include student loans, personal loans and credit cards.
Gareth Mountain, executive and head of sales at Olico, says: “Banks are still strict with their selection process, and certainly do not offer loans on a whim. But it turns out that unsecured loans are far easier to come by for certain personal profiles than other.”
When applying for an unsecured loan there are usually two stages to the approval process, Mountain says.